Consumer Incentives for Healthcare

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Healthcare Incentives Environment

• Employers must implement programs that drive behavioral change and encourage people to take responsibility for their own health.

• Total healthcare plan costs per employee have risen over 89.9% in the past 10 years, and are expected to increase another 6.4% in 2009.

• In a 2008 survey of large employers by consulting firm Watson Wyatt, 50% of the companies used incentives to encourage workers to participate in health improvement activities such as smoking cessation and weight management. That number is expected to grow to 75% in 2009.

• In 2006, a major insurer instituted a healthy living incentives program for its employees. The program invests up to $600 per employee in incentives each year.

• ChipRewards offers a full-service incentive solution across the spectrum of health related behaviors.

• ChipRewards provides health related incentive offerings using the most advanced principles in behavioral science.

• ChipRewards offers a point-based reward currency using a pay for performance model. Sponsors pay when the desired behavior occurs.

• ChipRewards technology tracks and monitors an individual’s response to incentive offerings.

• ChipRewards offers a wide variety of messaging tools to communicate incentive offerings and account information to the ChipRewards member.

• ChipRewards delivers a, seamless end-to-end electronic incentive solution that functions without administrative overhead or fixed costs.

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About ChipRewards

“Sponsor”Any entity paying for a promotion.

“Promotion”An incentive offer that is communicated to an individual. Promotions define what behavior needs to occur and the reward for the behavior.

“Transaction”A specific behavior that is captured for tracking purposes.

“Scoring”The process of applying promotion rules to a captured transaction, and then transmitting the calculated result to a member or sponsor account.

“Reward Currency”The reward a member receives when they perform a desired behavior (points, miles, CHIPs).

“Redemption”The practice of a member trading in their earned reward currency for the product or service they desire.

“Multi-Sponsor Model”A form of incentive program design that allows members to earn from multiple sponsors at once, increasing the value of the overall program to the member.

The Language of Incentives

A reward program with multiple sponsors allows members to participate in more promotions and earn more rewards. This model increases the value to the ChipRewards member and eliminates the dependency on a single sponsor for success.

Employers, TPAs & Health

Insurers

Consultants for Benefits, DM, Wellness & Rx Management

Retail Rx Associations &

PharmaciesPBMs

Fitness, Diet & Healthy

Purchases

Suppliers & Manufacturers

Who Sponsors Health Promotions?

Health promotions are provided by many types of sponsors:

A health promotion is developed through the following steps:

1. The sponsor prioritizes what needs to change within the population

2. The sponsor and/or ChipRewards performs behavioral analysis to determine the most effective “chain” of behaviors

3. CHIPs are allocated for each behavior performed

4. The promotion is communicated to the member by the sponsor and ChipRewards

5. Eligible member transactions (behaviors) are captured by ChipRewards

6. ChipRewards scores and reports transactions to member and sponsor accounts

7. Member redemptions are processed by ChipRewards

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Anatomy of a Promotion

Step 1: Determine What Needs to Change

Prioritize what element needs to change within the population -

• When does the change need to occur? Now? Tomorrow? In the future?

• What are the financial benefits of the change? What is the ROI?

• How much is the sponsor willing to invest to produce the change?

Select key targets for promotions -

• What segments of the population have the most potential for change?

• What qualities/characteristics are observed within the population that can help identify targets?

Example Promotion Areas

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1. Wellness

2. Disease Management

3. Pharmacy Management

4. Safety

WellnessPromotions

Disease ManagementPromotions

Rx ManagementPromotions

SafetyPromotions

Exercise & Activity Participation

Preventive ScreeningGeneric

ConversionLunch & Learns

Meeting Attendance

Health Risk Profile Completion

Diagnostic Testing

Formulary Fill/Refill

Department ProgramParticipation

Smoking Cessation Program Participation

HypertensionManagement Coaching

Adherence & Compliance

Safety CourseCompletion

Steps 2 & 3: Behavioral Analysis & CHIP Allocation

• Precursor Behaviors

• Target Behaviors

• Maintenance Behaviors

Promotion 9: Earn 1,500 CHIPs when you renew your generic prescription

Promotion 8: Earn 1,000 CHIPs when you refill your generic prescription

Promotion 7: Earn 2,500 CHIPs if you make the switch within 45 days

Promotion 6: Earn 1,000 Bonus CHIPs when you switch at a preferred pharmacy

Promotion 5: Earn 10,000 CHIPs when you make the switch

Promotion 4: Earn 100 CHIPs when you learn about switching to generics

Promotion 3: Earn 100 CHIPs when you calculate your conversion savings

Promotion 2: Earn 400 CHIPs when you print your conversion message

Promotion 1: Earn 100 CHIPs when you activate your ChipRewards account

Step 4: Member Communication

Member Account View

• The ChipRewards web-based platform enables members to easily view promotions, benefits and redemption catalog online.

Step 4: Member Communication

Member Messaging Tools

• Provide timely information to members through direct mail, email, text or multimedia messaging.

• Messages can be provided for intervention purposes, promotion notification or in the form of statements. Communications can occur retrospectively or prospectively and in real time

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Mobile Web Application SMS and MMS Reminders Electronic Statements

Step 5: Capturing the Transaction

Medical Claims

Aggregator

Pharmacy Claims & Real-time

Switch

Internal Software

Target Behaviors Captured By

Integrated 3rd

Party Software

Scan or Swipe Device

Eligible Pharmacy

Transactions

Eligible Medical

Behaviors

Internal Participation

Files

External ParticipationTransactions

OnsiteParticipation

Files

Who?

What?

When?

Where?

• Preventive Screening• Diagnostic Testing• Occ & Physical Therapy

• Generic Conversion• Formulary Fill & Refill• Compliance/Adherence

• Onsite Flu Shot• Lunch & Learn Meeting• Gym Visit

• DM Coaching Session• Health Screening• Smoking Cessation

• Exercise Program• Weight Loss Program• Safety Program

Eligibility Files

Web-Enabled

Platform & Processing Engine

Step 6: Member & Sponsor Reporting

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ChipRewards platform provides activity reporting and accounting systems to support sponsors, members and customer service.

Member Account View

Sponsor Reporting

Example of Member Earnings

5,000CHIPs

24,860CHIPs

2,400CHIPs

3,350CHIPs

Annual CHIPs earned by a Member from sponsored promotions:

Sponsor:Employer/Health Plan

Sponsor:Wellness Provider

Sponsor: PBM

Sponsor: Pharmacy

Screenings 10,000 Join Program 1,250 Timely Refills 1,000 1st Rx Fill 1,000DM Program 6,860 Engage 1,500 Mail Order 1,000 Compliance 2,000Fitness Program 8,000 Complete 2,250 Drug Education 400 HSA Purchase 350

Total CHIPs earned in 2008: 35,610

Step 7: Member Redemption

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